Take It To The Board with Donna DiMaggio Berger
Take It To The Board with Donna DiMaggio Berger
Community Association Insights with Industry Leader Dawn Bauman of the Community Associations Institute (CAI)
Learn the secrets to help your community thrive on this week’s Take It To The Board podcast, as host Donna DiMaggio Berger sits down with Dawn Bauman, Senior Vice President of Government and Public Affairs at the Community Associations Institute (CAI). Dawn is a leading advocate for HOAs, condos, and co-ops across the U.S. and internationally. With nearly 50 public policy initiatives under her leadership—including fair housing, pets, assistance animals, and removing racially restrictive covenants—Dawn has been at the forefront of policy development for community associations.
In this episode, Dawn shares her vast expertise with Donna as they dive into the 2025 legislative priorities, including building safety, financial challenges, property rights, environmental sustainability and diversity issues focusing mainly on trailblazing states like Florida and California. Dawn discusses the critical data CAI has gathered on the community association lifestyle and the various resources and initiatives she oversees. They also explore the essential role of developers and realtors in educating potential buyers about community association responsibilities. Emphasizing the power of grassroots advocacy, this episode highlights CAI's efforts to influence public policy and make it more accessible to its members.
Lastly, learn about CAI's recent lawsuit to exempt community associations from the impact of the Corporate Transparency Act (CTA) and what that might mean for your board before the Jan. 1, 2025 deadline. Don’t miss this in-depth discussion on the future of community association governance!
Conversation Highlights Include:
- CAI’s top legislative priorities this year and how they could impact community associations across the country
- How board members and residents can get involved in supporting legislative efforts
- How trends in the areas of governance, technology, and homeowner engagement might shape the future of community living
- The most significant challenges facing community associations today and how CAI is addressing these issues
- Promoting diversity, equity, and inclusion within community associations
- Best practices and critical differences in how community associations operate internationally compared to the U.S.
- New CAI educational resources for board members, managers, and homeowners
BONUS: Learn how to join the fight to exempt community associations from the burdens imposed by the Corporate Transparency Act (CTA)
Related Links:
- Podcast: A Board Members' Guide to Unexpected Issues - Your Questions Answered
- Podcast: The Do's and Don'ts of Association Committees with Becker’s Ken Direktor
- Podcast: Boot Camp for Board Members: Army Vet, PCAM and Becker Shareholder, Howard Perl, Discusses the Benefits of Rigorous Board Member Education
- Resource: Community Associations Institute (CAI) Website
Hi everyone, I'm Attorney Donna DiMaggio-Berger and this is Take it to the Board, where we speak condo and HOA From the boardroom to the legislature. Our guest today has her finger on the pulse of the critical issues facing all types of community associations. As the Senior Vice President of Government and Public Affairs at the Community Associations Institute, or CAI, dawn Bauman is the voice of advocacy and education for HOAs, condos and co-ops throughout the US and in other parts of the globe. Dawn and her team have produced nearly 50 public policy initiatives, including policies on fair housing, pets and assistance animals and the removal of racially restrictive covenants. She works directly with CAI's 36 state legislative action committees and the College of Community Association lawyers, ccal. I'm a proud member to further CAI's mission. So today we are going to do a deep dive into the issues that Dawn thinks are most important to help communities not just survive but thrive. So with that, dawn, welcome to Take it to the Board.
Speaker 2:Hi Donna, Thank you so much. What a pleasure to be here. Thank you for having me.
Speaker 1:Well, we're honored to have you here. We know you're a very busy lady and there is a lot going on in association land, throughout the country and, frankly, throughout the globe. I'm going to ask you about your global outreach later, but can you start us off by giving us just basically an overview of what CAI does for the community association industry?
Speaker 2:Absolutely so. Cai Community Associations Institute is a membership-based organization for people living and working in community associations, and our North Star is basically to do everything we can to create the best form of housing available, which is community associations, as you mentioned condominiums, homeowners associations, housing cooperatives. We have education initiatives, best practices, standards of practice, education curriculum, roadmap for professionalism for community association managers, trends, contemporary topics, research, as well as advocacy for community associations.
Speaker 1:So that's a lot. So let me ask you first. I want to find out what led you onto this path into community associations.
Speaker 2:You know, like any good young professional in the late 90s, I answered an ad in the newspaper, so I started actually as the chapter executive director for the Arizona chapter of Community Associations Institutes 27 years ago and just worked my way around. I was also executive vice president of the Washington Metro chapter our largest chapter and then moved over to our national office and have held a number of different jobs at the national office, including my current role. Are you based in DC? I'm in Alexandria, virginia. Our offices are in the Washington DC metro area.
Speaker 1:Yes, oh, that's a great area. That's a great area of the country to be located in. It is, it is, it is. I'm in steamy South Florida right now. I got away for a little bit but, yeah, I love that area, I love the metro area and I love Alexandria as well, so you're a lucky lady.
Speaker 2:Yes, I am. It's a great place to be.
Speaker 1:As I said in the intro, you have a passion for this. It really does shine through in what you do, so I want to talk to you about your top legislative priorities this year. Yes, Excellent.
Speaker 2:Listen, I do have a passion, and most people who are involved in this industry, just like yourself. We have a passion for just creating an industry, creating a form of housing where it's the best it can be, where people are happy, where property values are the best that they can be. People are happy living with their neighbors and in their communities, and so, to address some of those issues, we work with the local, state and federal legislatures on public policy that makes sense for community associations. And what I anticipate in 2025 on the state level and this is across the states, not just Florida I know you have a lot of Florida listeners, but Florida leads the way. Florida and California. I know that's like a dichotomy. In many ways, however, florida and California really lead the way for legislation in this area of housing.
Speaker 2:But what I anticipate in 2025, more states addressing reserve funding reserve. So transparency issues, authority and obligation issues. From a board member standpoint, I also expect to continue to see property rights type issues, whether it's rentals or environmental sustainability, but still property rights electric vehicle charging stations, solar panels, things like that. Those are the top trends that I anticipate in 2025. Listen, we track more than 2000 bills a year In 2025, every single state will be in session. That doesn't happen every year, like, for example, 2024, four states were not in session, but in 2025, all states are in session, no holds barred. We're going to have 2000 bills that we're tracking and working with all of our volunteers to do the best we can for our members.
Speaker 1:Yeah, that's a lot of work. You said Florida and California lead the way. Is that because of the number of association bills you see coming out of those legislatures and is that tied to the significant population Dawn living in shared ownership housing communities?
Speaker 2:Yes, for those who can't see me, because I know you hear my voice, I'm nodding like crazy. So Florida and California the top two states with number of community associations, the top two states with percentage of community associations, the top two states with percentage of people in those states living in community associations 40 to 50% in both of those states. Well then, what happens? Right, when you have a lot of community associations, you have a lot of people living in community associations, you have more laws. Typically, now, in a state like Florida, because it is a more conservative state from a political standpoint, you would tend to think you would see less laws. Nope, nope, not in Florida. We are unique, yes, you are unique. You, being Florida, are unique, but you are too Donna and so there are lots and lots of laws, interestingly in Florida.
Speaker 2:Florida does this differently than most states in that you have the condo, hoa, housing, co-op all three and things really run together one for condo, one for HOAs. It's often that we're seeing those starting to come together instead of really like the three pillars in Florida just are not breaking down. And in California there's one law. It's the Davis-Sterling Act. It's for common interest developments, which is the term in California that encompasses all community associations, condos, co-ops and HOAs. So that's just one law. It's more efficient, but also it digs deeper into detail, just like Florida does on some of these issues that other states just don't have the type of detail. And when I'm talking about detail, I'm talking about voting specifics, election specifics, transparency specifics, website requirements. Those are things that we only see in states like Florida and California.
Speaker 1:Yeah, we drilled down in Florida even to the percentage needed to approve a material alteration, right? Do you think there's going to be a trend on towards consolidating the shared ownership statutes, like you said, the UCOIA, the Uniform Common Interest Ownership Statutes? I mean, florida has always taken the position that these are unique housing types. They've overlooked co-ops. I don't know co-ops for better or for worse, they've been pretty much bypassed for years. Now it's starting to get a little closer between 718 and 719. But there's always been the feeling in Florida that homeowners associations, they're just a different type of community and the expectations in terms of the laws should be different. Do you think that's going to change? I imagine there's a few other states that kind of take the Florida approach as well in terms of differentiation.
Speaker 2:They do. And I think what we'll always see is we'll always see the differentiator for condominiums because of, oftentimes, the building, there's co-ownership in the building itself. The proximity, well, just I mean the structure, yeah, there's co-ownership in that structure and with homeowners associations, single family homes you don't always have that, of course, townhomes garden style nuance, there are some nuances there, but you'll always have that condominium specific law, I think. But then when it goes to board authority and when it goes to transparency and what community associations can and cannot do on homes and the part of the home that's owned just by the owner and doesn't have any co-ownership, I think that's going to continue to be locked together and just that building facility piece will continue to be separate. I think If you have a shared roof or if you have a roof that's just owned by that condominium building, solar is a much different conversation than a single one.
Speaker 1:Agreed, agreed. You must be happy that Florida only has a part-time legislature. Is that true for California too?
Speaker 2:It is true, california is part-time-ish. They go for a longer period of time and they take a break throughout the year. So it is part-time, but they legislatures in the US have sessions that last 120 days or less. That's very typical. The year-long legislatures or those legislative sessions that last nine months or more, it's just rare. So January through May are crazy months for legislative sessions.
Speaker 1:You know what they say the more time in government, the bigger the problems, but I don't know whether or not that's borne out by the data. So we talked a little bit about what you think the issues are going to be going forward, and I agree with you. What do you say to the haters out there who just hate HOAs? They love to see HOAs just abolished. I mean, this comes up. You know we're in our third season here on Take it to the Board. We've had all number of different experts in the industry join us.
Speaker 1:One thing that does come up occasionally is that there are people that literally hate the shared ownership lifestyle. You know my response had always been then don't purchase in the shared ownership community. But the pushback to that is there's fewer and fewer homes, certainly in condo units you can't get one outside of a condo building but homes being built outside the scope, outside the framework of a mandatory association. What do you say to people who just don't like living in these communities? They don't like these communities and they don't think they should exist so.
Speaker 2:I disagree.
Speaker 2:You know I never apologize for the community association housing model.
Speaker 2:I do believe it is amazing, and data and statistics continue to tell us and inform us that people are happy living in their community associations.
Speaker 2:I'm also executive director of CAI's Foundation for Community Association Research, and every other year we commission Zogby International, a polling company, to conduct a survey for us to reach out to people who we don't know it's their own list to ask them how happy they are living in their community association, and more than 80% of people living in community associations rate their association as better than neutral, so they are either satisfied or very satisfied living in their community association. There's only 11 or 12% of those living in community associations that don't like their community association, which means there are haters, right? So if that's 11%, let's just even call it 10%. There are 74 million people living in community associations. 10% of that is 7 million, so a lot of people who might not be happy. But I will tell you our satisfaction rate is so much higher than almost any other profession out there and almost anything else you could look at out there, including Congress, of course, Right.
Speaker 1:Oh, that's a point, that's a fair point, but what's the alternative? Let me, before I ask you that. I will's a point, that's a fair point, but what's the alternative? Let me, before I ask you that I will tell you.
Speaker 1:I live in a homeowners association. I love it and I think our board does a great job. We have a very community-minded focus here. Neighbors know neighbors. I think the board strikes the right balance between enforcing the documents and not being heavy-handed. I think they look at problems on a case by case basis. I don't think they're overly rigid. I also don't think that they're pushovers. So I think this particular HOA does a great job. I lived in a condominium association prior to this, when I was first out of law school. That one had a few more challenges, but I think I kind of knew what I was getting into when I was buying into a mandatory association and I'm pretty much, having gone to law school like you, a rule follower to a certain extent. I think a lot of this is unrealistic expectations or I'm moving into a community. I haven't really educated myself about what this means, what this entails. What do the documents allow me to do? What do they not allow me to do? And I think that's maybe where the tension arises. What do you think?
Speaker 2:Yes, I agree with that. So, interestingly, I think that it has to do with the time in which community associations have existed in the marketplace. So, for example, in New York some of the oldest buildings, condominiums, housing cooperatives in the US right, the homeowner satisfaction rate in New York is higher than the national average and I am convinced that's because people have had more of an understanding of living in community associations for a longer period of time, so they're just used to it and they just like it. What we see in New York and I know that we're going to talk about this a little bit later, but one of the interesting lessons I've learned from talking with people in other parts of the world is when you have older buildings and a community association housing model that's been around for a longer period of time often ownership passed from family, from generation to generation.
Speaker 2:Staying within the family you have a greater sense of satisfaction and understanding of roles and obligations, and I think that goes two ways rights and responsibilities, roles and obligations of the owners and the board members. So when you have board members of new communities or new in the marketplace and their role follows, they're just trying to do their best job. They might not be as reasonable as people who have been around a bit longer, because they know where you can have more reasonability and where you have to be more rigid. And I think, as that evolves, we're going to continue. In my opinion, I'm a total optimist in the community association housing model. I think we're going to see continued satisfaction in this area of the housing model Well along those lines.
Speaker 1:Do you think developers and realtors could also play a significant role in getting people off on the right foot when they're buying in these communities? A lot of times developer realtor they're focused on the amenities and the view and what the unit looks like or the home looks like. What about also selling the lifestyle? What role could they play?
Speaker 2:Absolutely Selling the lifestyle and also informing about roles and responsibilities and obligations. I often make the parallel of the lead paint disclosure and the community association disclosure. So the lead paint disclosure the real estate agent selling a home that has lead paint has to talk to that owner about that lead paint. They have to sign, I believe, and the owner has to sign that they have read through this disclosure together. I would love to see that for real estate agents in the community association housing model. What do you know that there's a community association here? What does that mean to you? Let's look at the finances. Let's look at the rules. Oh wait, you have a dog. Just so you know, you have to have your dog on a less than six foot leash when you're walking in this area of the building, because some people are afraid of dogs. Are you okay with that? Having those conversations signing off on it, making sure that everybody understands? I think that the world would be a better place if we had those types of requirements.
Speaker 1:I couldn't agree more. In Florida there are condo riders, there's HOA riders. I'm sure this is true in other states as well, but I think they're glossed over. Again, they're a rider and I don't think they're a main discussion point outside the financing and the purchase price and all the rest of it. So yeah, I do believe that developers and realtors can play a role in really discussing what this lifestyle means, particularly for people who may be coming from other countries or even other states, who've never lived in a mandatory community association before. So who knows?
Speaker 2:I will say so in our homeowner satisfaction survey. Again, these are not CAI members that we're asking questions of. These are people, just typical old Americans living in the US. So one of the questions that we ask, or a set of the questions that we ask, is related to did your real estate agent tell you that you were buying into a community association, yes or no? Tell you that you were buying into a community association, yes or no, and did that make a difference in your decision? And both of those questions are positive for community associations.
Speaker 2:I was super proud of the real estate agents because it's something like 70% advised their clients that they're living in a community association. Great, Exactly, Well, I'd like to see 100%, but that was a higher percentage than I anticipated. And the second question well, how that impacts your behavior and it was again about two thirds said it either didn't impact or it had a positive impact. It made me want to buy in that community association. A small percentage said, ah, that made me decide they didn't want to. So I realized that what you said earlier, which is, listen, there are other options of housing, so you can always choose your style of housing that works best for you, Maybe in some cases some localities are only allowing building in community associations, so that's not going to be as easy. But you can select the community that you're buying into and you can get to know the board. You can get to know your neighbors. You can ask those questions before you move in.
Speaker 1:And I want to talk to you in a few minutes about the housing choices that some of our older Floridians are going to be facing in the near future because of all the new laws in Florida relating to engineering inspections and mandatory reserve funding. But I wanted to talk to you first about your grassroots advocacy. So, CAI runs a lot of campaigns. Just kind of walk us through what a typical grassroots campaign would look like for CAI and how you engage people living in these associations to get involved with those campaigns.
Speaker 2:Sure, absolutely, and thanks for asking that because it's really the power.
Speaker 2:If you will and I use air quotes for those of you because you can't see me the power that community associations have are the number that we have as an organization, is the number of people living in community associations 74 million in the US Voters and people who live in community associations, who spend their money in local economies and in the national economy.
Speaker 2:So, to get engaged with grassroots campaigns when we have a open, grassroots campaign, which is typically an email, a phone call or a meeting campaign with your legislator and it could be local, state or federal we send out emails or we have webinars or we communicate with our members saying, hey, this policy issue is being considered, at whatever level of government it is, and we think it's going to be important to you because it impacts the way you live in your community.
Speaker 2:So we give information about the issue, why we think it's important to community associations and give then owners, boards, managers, professionals, the opportunity to contact their legislator and share how this potential law will impact them personally those stories.
Speaker 2:We do a lot of lobbying and advocacy work and we do a lot of research on how to be effective the number one way to be effective in influencing a public policy is to have constituents share information with legislators about how it impacts them personally, and what we want is what's best for the community association housing model. That's why you mentioned earlier, we have more than 50 public policies on different topics for the community association housing model and we make it really easy, so we give people the exact instructions on what they could do to help have their voice be heard, whether it's again a phone call, an email, a meeting, a visit, town hall meeting, follow someone on Facebook, tagging someone on Facebook, going to a meeting in a district or state or federal office All of those ways can have a profound impact on some of these laws that are being considered by members of the legislature.
Speaker 1:Well, you took the words right out of my mouth which I was going to say. I imagine you have to make it easy for them because people are busy, they're living their lives. There's a reason we call the silent majority the silent majority, because a lot of them they just don't even have time to lift their heads up from work or family matters to engage. So phone calls, I guess, are great. Do you set up, like phone banks, 800 numbers that they can use you?
Speaker 2:can give phone numbers or we have some functionality with web-based phone calls. That make it really easy. If you click on an email, we have different options and can you help them craft, because a lot of times they get lost in the make it really easy, if you click on an email, that we have different, different options that and can you help them craft, because a lot of times they get lost in the crafting of the emails.
Speaker 1:I've seen this myself where I mean do you help them kind of frame the argument? I guess chat gpt could do this now too, right oh?
Speaker 2:yeah, and we should probably use that a bit more than we are, but we actually draft some template language for people to read, understand and then use pieces of it whatever makes sense to them when they're emailing or sending a letter or even creating a script from themselves to talk with a legislator. We have 46,000 members almost 47,000 members throughout the US and in some other countries as well and we have almost 100,000 advocates in our advocacy system. So we have people who go beyond our membership, who are just engaged because this is super important to them. So you don't have to be a member to be an advocate and, again, it's one of the best ways for us to impact public policy.
Speaker 1:Well, I will tell you, it is rare for me to say to somebody, when they're asking me for resources to reach out to CAI or the Community Association Institute, for that person not to know about the organization I'm referring to. But occasionally, occasionally, somebody will be CIA, cai, what, how do you, in terms of, you know, trying to reach out and grow your ranks? You know what are the different avenues you use.
Speaker 2:Well, listen, we have a ton of resources for people who are living in community associations, considering buying in community associations or on the board committees, et cetera. So we push those and a lot of our resources are free. We push those resources out using Google AdWords, using LinkedIn, Facebook, Twitter, so that we can push out as much as possible standards of practice, best practices, resources to help community associations run as the best that they can possibly run. So we use as many channels as we possibly can. We also work with our own members, our community association lawyers, our CCAL fellows, our PCAMs and CMCAs and AMS credentialed managers, and urge them to share these resources with their clients as well.
Speaker 1:Listen, every time I go to one of the law seminars that you put on, I am walking away with a half dozen books, because I just happen to be a book worm. I have more books in my house than just about anything else, but you do have great resources. So at the end, I want to make sure you give us some links so people know where to find you, where to find those resources. I want to talk to you about challenges. I mentioned Florida, but there's challenges across the country that associations are facing. What do you think, Dawn, are the most significant challenges right now facing people living in condos, co-ops and HOAs?
Speaker 2:So I'll start with the challenge of just financial security for that community association and safety, and when I'm talking about safety, I'm talking about condominium safety, building safety and not just because of the tragedy that happened in Florida in 2021, but it's brought to light that so many community associations likely don't have the reserve funds that they need to address issues that will need to be handled in the coming years, and I talk about this all the time.
Speaker 2:I'm not saying that buildings are unsafe. I'm not saying that maintenance is not being done, but what we know. We've done some research on the age of buildings in the US and when these buildings were built. So two-thirds of the buildings in the US the residential buildings, so condominiums, townhomes in the US are going to be 40 years old or older two thirds of them and we know that during the time that a lot of those buildings were built the 70s and 80s there were building codes that are no longer acceptable practice today. So that doesn't mean that the buildings are going to fall down, but what it does mean is these are not the buildings in Europe that you see that are never going to have a problem, because they are built with the most amazing concrete that you've ever seen before, right.
Speaker 1:And you see, they're not the Coliseum, right, they're not. And let me just stop you there really quickly.
Speaker 2:You don't need a whole building to fall down to have aum Right, they're not the Coliseum and let me just stop you there really quickly.
Speaker 1:You don't need a whole building to fall down to have a tragedy. Okay, you can have one balcony fall off or a chunk of concrete in a parking garage fall on somebody and kill them. So we also need to redefine what a tragedy is as well.
Speaker 2:I mean, a building collapse is the worst tragedy but there are personal tragedies that happen all the time needed and the instruction that they needed to make sure that maintenance and reserves were funded properly. We just didn't do a good job of that and unfortunately, it took a tragedy for us to realize that we have got to change laws to give boards the authority to collect money and pay for critical repairs in their building and maintenance in their building not critical maintenance, preventative maintenance in the building. Because if you don't have a preventative maintenance program and you're not undergoing or not constantly feeding that preventative maintenance program, guess what? You're either going to have a tragedy or, by the time you're able to do the maintenance that needs to be done, it's going to cost you 30% more than it would have if you just paid for it when it was preventative maintenance. So those are lessons that we've learned as an organization and that's why we are so focused on changing those laws to give the boards the authority that they need.
Speaker 2:Now. Does that cause challenges for people and boards living in associations? From a financial standpoint, it absolutely does. We haven't done a good job at clearly letting people know how much it costs to live in a condominium building or in a shared ownership building, setting townhome, et cetera, because it's not just your condo fee and your mortgage and your taxes, it's also those maintenance fees and saving for repairs that need to happen. So, but I think what's important is passing those laws, but including enough time, enough resources, so that it doesn't create a financial crisis for people living in the association so they have to sell and they have to leave, or or where property values start to decline because that association's not able to do what they need to do, and we have quite the perfect storm, and I actually am not intending that pun. We have quite the perfect storm with insurance and the crazy insurance premiums, as well as condominium maintenance, especially in Florida. We have this demand on financial requirements by owners, which is very challenging.
Speaker 2:I would like to see the legislature give more space and room to fund those reserves, because we cannot create a situation where the condominium building can't get the insurance that they need, can't get a mortgage, because Fannie Mae and Freddie Mac aren't going to give a mortgage in a building that doesn't have the right insurance, the right insurance Again, air quotes because, fannie and Freddie, they don't even know what the right insurance is and they don't even realize and understand how this insurance is impossible to get and to have to fund those reserves, there needs to be some space.
Speaker 2:I don't think we're ever going to have a program where we're going to get people to give money to condominium buildings so they can fund all of this.
Speaker 2:That's not going to happen, but we might get some grant programs out there for condominium buildings that are in opportunity zones, which means that people are living in paycheck to paycheck, maybe they are retired, living on a fixed income. So I think we are working on some solutions from a funding standpoint there Again, not free money typically, but money that can help and we're working with a lot of banks to see how we can put some money into these buildings. And I think we're going to be looking at some case studies on how to be creative about determining the next steps for this building. And I'm not saying sell it and sell it to a developer and tear it down and everybody is left homeless. I'm saying I think there are some creative solutions out there that are going to take a lot of professionals, a lot of conversations, but I think that may be. I think those conversations in 2025 are going to be really important.
Speaker 1:And along those lines, I think it may actually take some time to see some of the seeds that have already been planted take root. For instance, the Florida legislature has passed insurance provisions, insurance changes, over the last couple of years. Those were mostly aimed at tort reform. They said it was going to bring down premiums, bring more private insurers into the market. We'll see. We haven't seen it yet. In terms of free money, there's been a little bit of free money. Miami-dade passed an ordinance. They were giving grants out, but I think the $30 million went in three weeks. I mean, it's a drop in the ocean. It's the same thing with the my Safe Florida Condominium pilot program that Representative Lopez passed this last year. Same thing. It's a start, but it's not enough.
Speaker 1:I did want to go back because I agree with everything you said. I was also nodding my head. We're capturing the audio here but in some cases, Dawn, we had buildings that did have healthy reserves. It was a question of priorities. So we saw associations spending time, effort and money on aesthetic projects. Everybody loves the landscaping, Everybody loves the lobby. Redo. They like to redo the railings, Everything. You see, the pretty stuff, the other stuff, the structural stuff, it's not as of much interest because you don't see it immediately, and if we could really work as an industry to try to shift those priorities to let them know. You know the basics dinner before dessert type of thing, right, but we've had too much dessert before the dinner and then when it gets time for the dinner there's really no. People are fatigued. They've already had special assessments for the improvement projects and now they're looking at significant assessments for the stuff they don't see really, the concrete restoration, the plumbing, the electrical, things like that. Do you think we can work on trying to shift priorities here?
Speaker 2:Absolutely, absolutely, and you said it right we need to work together. Everybody like. We work with you guys, we work with the engineers, we work with the architects, we work with the reserve study professionals, we work with the local municipalities so people working together to find some of these solutions. We participated in a task force, a county task force, in Delaware, in one of the counties in Delaware, and we passed building inspection legislation using this task force. We talked about insurance issues, we talked about a variety of issues and we also participated in a task force with 20 plus different professionals related to our industry in Virginia, just working together and having these conversations.
Speaker 2:We can't do it CAI. We can't do it. We can't do it ourselves. We're amazing and we have some amazing resources, but it's bigger than us. We can lead the way in having these conversations, but engaging others in these conversations is critical to success. I believe and I think you're right Changing the conversation to dinner, before dessert. I think that is going to continue to evolve. I'm seeing it in different places or across the country. I'm seeing the conversation connect with more people. I think we're going to see evolution of board members as well in what their role and responsibility is and the support that they get from the statute.
Speaker 1:Yeah, I'm already seeing it, and it may be as a result of, for instance, florida's very stringent new laws that impose even criminal liabilities, for instance, florida's very stringent new laws that impose even criminal liabilities, criminal penalties I should say on board members who don't understand and in fact breach their fiduciary duty. But I almost think we need like a psychologist to go into some of these. You know, when businesses are failing or dysfunctional, sometimes they reach out to a business psychologist. Often it's boards who just feel that they can't impose these kind of increased assessments. But you have to pass a budget that meets your operating expenses. In Florida and other states you have to pass budgets that have reserve funding. So you know again, maybe we should be doing the Myers-Briggs test for board members to make sure that you're up to the task of doing what you have to do, even if it means you're not going to be the most popular person.
Speaker 2:Well, I think it's about that as well, and a different, less emotional way of governing these boards, because the statute is going to be there, so it'll be more business directed than emotionally directed, in my opinion. I just think we're going to be more of a corporate board setting than a. This is my home setting. I think that's what we're going to see in the next 10 years.
Speaker 1:And I hope that all this mandatory board education also assists with that shift. Just what you're saying, because now in Florida we've got robust educational requirements. Is that true? I know you monitor this across the country. Is that true for a lot of states Dawn that they're requiring board members to undertake pretty rigid educational courses?
Speaker 2:Our best practice and our standard of practice is board members should be educated, and we have a tremendous number of resources available to educate board members, just initially on what their role and responsibility is, and then on nuanced and specific issues reserves, finances, meetings, et cetera. But there are only a couple of jurisdictions that require mandatory board member training. But again, a best practice for us is to encourage everyone to have the training that they need, not just a four-hour course, but on a regular basis on all of the issues that face community associations.
Speaker 1:Yeah, I was going to ask your personal philosophy on that because I would imagine listen, a lot of board members. They get on the board and nobody onboards them. It's not like going into a job where somebody sits you down and teaches you. You know what your job is and here's how you do it and here are the tools at your disposal and a lot of these communities. You get on the board. Nobody tells you what the job is Nobody's really, especially if it's been. You're getting on the board because the entire prior board has left. Now you're really learning on the job, aren't you?
Speaker 2:Yes, well, so here's where I think we have vulnerability, and that is 30% to 40% of community associations in the US are managed only by their board, so they don't have professional management. So if you have a board that is elected and there's professional management, oftentimes that management company will do some board training and will certainly give some guidance and information, same as the insurance and the legal professionals. The attorneys will do that as well and of course, we have that training as well. But it's that 30 to 40% where they're elected to their board and they don't have the resources. They maybe don't know about CAI, they maybe don't know that they should have a law firm. They would benefit from having a law firm.
Speaker 2:They don't really know how to do the job. They don't even know the laws that exist. That's where we as an industry have the vulnerability and it's one of the reasons that we push so much of our kind of marketing of our free resources push out there, hoping that someone's going to do a Google search and say I'm a new board member, what do I need to know? And hopefully some of our free resources will pop up and they can read through them, they can take some courses and they can educate themselves so that we all live happily ever after.
Speaker 1:So, with your membership, what percentage are boards, associations, and can you tell me about the different type of vendor members you have at CAI?
Speaker 2:Sure, so I'll start high level first. We have three main areas of membership Our boards of community associations, managers, management companies. The second group and then the third group are business partners, professionals, service providers and the board members, the boards of our community association. That's about 40% of our membership. Another 30% of our membership includes the managers and management companies, so that's maybe even 35%. So that's about 70% to 75% of our membership. The last 25% to 30% are our business partners and business partners.
Speaker 2:How we categorize them? That includes everybody serving the industry Could be a developer, an attorney, an accountant, an insurance professional, a disaster recovery company, painter, plumber, landscape company, pool company, bank, et cetera. So all of those are business partners. We are so fortunate as an organization and as an industry to have the most amazing giving professionals in the world.
Speaker 2:Let's just look at our legislative action committees. Let's look at our legislative action committees and our chapters. Between our legislative action committees and chapters we have thousands of volunteers and I would guess that 20% of those volunteers are community association lawyers who are ready and willing to give their time, their expertise, to help write the law that's going to be best for people living in community associations, to help educate people, so that we're creating a housing model that works and creates great communities. We have really amazing giving selfless volunteers that give a lot of their time, and I think that's sometimes then when I hear oh, you're run by lawyers. No, it just so happens that they're not billing, they are giving their time and giving up a lot of their billable hours to just make the community association housing model better.
Speaker 1:I mean frankly, dawn, it helps us, it helps our clients, it helps you if the laws are written with a little more clarity. Dare I say so, yeah, that's never a bad thing. Could a rank and file unit owner join CAI, or do you have to be a board member?
Speaker 2:No rank and file homeowner can join CAI and we do have rank and file homeowners joining CAI and we actually are looking at creating some other opportunities for membership for the homeowners themselves. But we do have a lot of resources again free resources just for homeowners.
Speaker 1:I think that's important because, again, we're talking about being informed, making an informed decision. So for the person living there thinking maybe I wanna be on my board, maybe I don't, I think it's a great idea to get involved with CAI and your resources and really do a deeper dive into what it means.
Speaker 2:And what questions should I ask before I buy into a community association? What should I look for in my governing documents? What should I expect of my board? What's my role and responsibility? What is my obligation in paying assessments or voting and things like that?
Speaker 1:We even had to legislate that in Florida Dawn in terms of what should I, what should I know before I buy? Now it's mandatory that you be told what's the? What's the structural integrity of the building? Are there reserves? You know it's. So we have had to, unfortunately, legislate some things that you would have hoped would have been common sense and in in in our functioning transparent communities, they've been doing these things all along. But for the rest of for everybody else, sometimes you need a little help. How do you navigate those? Since you do have a diverse membership, how do you navigate when an issue comes up, let's say a big issue, where one segment of your membership may feel a certain way towards that issue and another segment feels differently?
Speaker 2:That's a great question and you would think that that comes up all the time, but it doesn't. It's fascinating. So, with our public policies, our North Star for the organization is to create community associations that are preferred places to call home, that are governed, managed, amazing communities. So that's where we go when we are looking at policy positions. And I'm going to use an example. Let's say there's a piece of legislation completely hypothetical. Well, actually it's not, it's real. There's a piece of legislation that says this is hypothetical Landscape companies must provide individual homeowners with a statement of the amount of money that they are paying individually for landscaping in their community. Let's just say that's a piece of legislation that has to happen, and I could see different opinions about that legislation.
Speaker 1:Okay.
Speaker 2:And the community association or its managing agents can only charge a dollar for providing that notice to homeowners. So we would look at that and say, okay, we always take it back to the community association and if there's a conflict and somebody it's not going to work for the community association, then it goes to the community association. So let's say, community association lawyers, associations every association has to hire a community association lawyer. Well, that might be good for community associations but it might not be good for all of them. There might be an association with two units and they don't need a lawyer. They have a lawyer on the board, so they really don't have to hire somebody. And let's assume that's a community association lawyer, not a divorce lawyer who's on the board. So it would be maybe good for lawyers but not good for the association. So we're going to go back to the association and make sure that our frame of reference is what's good for that association.
Speaker 2:And, donna, I know that it seems like it might not be possible, but 99% of the time what's good for the association is good for everyone else in the industry, including management companies, including the landscapers, including the pool companies. It's almost always right If somebody comes to us and says hey, there is a lead pipe plumbing issue that needs to be addressed because there are a bunch of condominium associations in Michigan with this lead pipe issue and we're a plumbing company and we think you should support this legislation. We're going to look at it really hard and see if it is a priority. While we don't want there to be issues with lead in water in community associations, is that going to be an issue that rises to the top level of priority and impact a lot of community associations? I'm not sure we would look at it, but it always goes back to what's best for the community association Not the homeowner, not the board member, not the attorney, not the manager what's best at community association.
Speaker 1:You just took the words out of my mouth. Because, let's be clear, when you keep referring to community association, you're referring to the community, not the board of directors. Again, but you're not referring to a hundred percent of the people, because the majority the majority.
Speaker 1:It's kind of. It's kind of what we're dealing with, and a lot of times it's a super majority. A lot of times you've got just about everybody on the same page, with just a few people who don't. Sometimes it's not that close, but I get that. We get that pushback as well, dawn, when we go to meetings. Well, who do you represent? The association or the board? Of course, we represent the association, but as lawyers and we're also looking at it within the same framework of what's going to work best.
Speaker 1:Obviously, what does this board have to do to fulfill its duties under the documents and the pertinent statutes? But we get that pushback too. Are you our attorney? Well, we're not your individual attorney, but we are representing the corporate entity. Of course, like any corporate entity, somebody has to be giving you directions. As lawyers, we do take direction from the board in terms of work requests. It's a really delicate dance and it's getting more complicated all the time as the stakes get higher, and by that I mean both in terms of the issues you've already addressed, dawn, with aging buildings, the new laws that are coming out, crises in the form of exorbitant insurance premiums it's getting a lot more complicated across the board.
Speaker 2:I agree. I agree. I really think we're going to see these boards transition, like I said, in the next 10 years into boards that are compliance-driven corporate boards, where it's just a bit different setting, and I think that that will help also manage expectations from owners as well.
Speaker 1:So let's talk about the Dreaded Corporate Transparency Act, or CTA, because I know CAI is all over that new law, which was designed to thwart money laundering in small to mid-sized corporations. I don't know that associations should have been caught up in that net, but tell us what CAI is doing with regard to CTA. I should say at the outset that it's a law that has a deadline that's coming up soon, and it requires directors serving on these association boards to disclose certain private, confidential information about themselves to FinCEN.
Speaker 2:That's right. So, yes, this is a law, the law passed, as you said, the compliance for communities that existed before January 1st of 2024, compliance is required by January 1st 2025. And we have a lot of information on our website. We have a guidance guide, a guidance document and lots of information about our advocacy and legal efforts challenging this law. So, right now, where we are, I want to be super clear. I'm not sure when this is going to air we might need to change this if something happens, but this law is in effect, it impacts community associations. If your community association is incorporated, even some that are unincorporated, I think you must comply with this requirement, unless you have $5 million or more in assets or in annual income and 20 employees that are your direct employees or you're a 501c4 IRS tax exempt organization. Otherwise, you're going to be required to comply.
Speaker 2:Let's be clear about that, but we're trying to change that. So we're taking two routes. One is our advocacy route, and we have been talking with members of Congress, talking with the Department of Treasury, which has oversight of this program, trying to get community associations exempt from this, because this is a law that is for small businesses, trying to find companies that are money laundering for terrorist activity. This is not something. There's no proof, there are no examples of community associations being used for money laundering for terrorist activity. So we believe the impact of this requirement on community associations is much greater than any benefits that we'll have from community associations having to comply with filing this information, this personal information, into a government database. So the advocacy efforts which we are pursuing trying to exempt community association there's a bill out there right now that would exempt community associations from this law Are you optimistic about that bill, Dawn?
Speaker 1:No, I am. But the bill, this law, has been challenged in two different jurisdictions. But here's the thing, because I've been asked about that it's only the plaintiffs in those lawsuits that are now stayed from having to comply. Everybody else does and, yes, this episode may. It will not be released for a few weeks, so if something changes, we will have a voiceover and we'll thank CAI if they got this done. But it almost makes me think. Like, do our public policymakers forget that condos and HOAs exist and that they are? Yes, they're not-for-profit corporations for the most part. There's an occasional for-profit co-op, but for the most part they're not-for-profit corporations, but they're only operating and administering a private residential community. Do they just forget about these?
Speaker 2:entities. Yes, they forgot about these entities. I really believe they forgot about these entities, and so, by the way, there are six lawsuits in different jurisdictions.
Speaker 1:Oh no, there's six OK.
Speaker 2:Another one was filed in Utah. So we have Michigan, utah, alabama, I think it was Pennsylvania too, pennsylvania, and so we are also filing a lawsuit. We are filing a lawsuit specifically for community associations, challenging community associations, this application to community associations, and I expect that we're going to have our lawsuit filed before the end of the summer, before fall. So we are hoping to have we're filing for preliminary injunctive relief. Is that right? Did I say that right? Yeah, you said that right. Wait, wait, oh, I thought you were a lawyer. I'm not a lawyer.
Speaker 1:You imitate one really well, I thought you were. But yes, you said that correctly.
Speaker 2:So we're filing our complaints, which includes a preliminary injunction, because we want to try to get this stopped before it goes into the requirements. The deadline hits, which is January 1st. Now we're also advocating for an exemption through FinCEN and through Congress. Now that's really three different prongs. The Congress piece I'm not sure that's going to pass. Listen, what has passed this year? Right, not a lot's passing in Congress. All we really have left this year before the election is going to be appropriations bills, and it's a possibility, but I don't think this is going to go into the appropriation bills. So I'm not hopeful. It's not a no, but I'm not hopeful. An exemption through FinCEN we have filed an exemption request. We've had numerous conversations with FinCEN. I know that they are considering our exemption request, but the wheels move slowly and bureaucracy moves slowly. So if a request were to happen or if an exemption were to happen through the Department of Treasury, I don't see that happening before the deadline either.
Speaker 1:It's possible and just not hopeful. This is one area where I don't think grassroots advocacy is going to get it done. I think it's going to get done in the courts. That's just my gut instinct.
Speaker 2:So, and then you mentioned the plaintiffs in the other cases are the ones that have benefited from the court ruling. So the Alabama case which came out earlier this year, national Small Business Association versus the Department of Treasury it turns out the Department of Treasury interpreted that ruling to apply to all the members of the National Small Business Association. So we are encouraging people to join CAI because our lawsuit is possible, that it would apply to community association members. If we get a favorable ruling, it would apply to community association members of CAI. It's not guaranteed and we're not trying to create a situation where it's a bait and switch, but it is a possibility.
Speaker 1:So we are actually we'll have some special membership pricing as well, well, that is a very interesting possibility, and at the end of the episode you'll let folks know where they can go to get more information about membership.
Speaker 2:I absolutely will, but I will tell you right now because the Corporate Transparency Act information about it changes daily. You can go to our website at caionlineorg forward slash CTA. So I go to that website because, again, it changes daily.
Speaker 1:Yeah Well, when you got a big thing like this, I don't know why. It was never fun to serve on the board in the first place, but they're making it less and less appealing, Dawn.
Speaker 2:Absolutely. It's pretty listen $10,000, $500 a day in fines. If you, let's say, you file and then you file all of your information, all your passport information, all your driver's license information, and then you get a new passport Within 30 days, you have to go update your filing with that new passport and if you don't you could have penalties of $500 a day up to $10,000 in time in jail.
Speaker 1:Okay, this is. This is bleak. You're going to have to fix this, Don. You'll come back and you'll let us know, and if you do fix it, we'll we'll definitely throw you a parade.
Speaker 2:It's not me. We have an amazing team and our advocates. We have 90,000 advocates the people who are reaching out to their members of Congress. It's been very helpful.
Speaker 1:Before I let you go, because you have been so generous with your time, I want to talk about one other initiative that you've been pursuing lately, which is your diversity, equity and inclusion within community associations. And I can tell you you know, I started in this industry. My son was in diapers, he's now a New York City attorney and I have seen board compositions change over the last three decades, but it's changing slowly and again, it greatly depends on where you are geographically located. But can you tell me a little bit about your DEI initiative through CAI.
Speaker 2:Yes, thank you so much for asking about that. It is such an important initiative, and so I've seen some different studies on the demographics of homeowners associations and I do believe there are a greater percentage in homeowners associations overall in the US, a greater percentage of whites living in community associations than any other race In condominiums. That's different. We don't have exact data on this, but there have been some studies that I've seen on this particular issue and what's important is that when we look at diversity, when our boards look at diversity, when people look at diversity, their look and inclusivity they're looking at leadership in the organization. They're looking at the way they do business, the way they treat people, the way they talk to people and creating equity in the community for everybody, or writing letters and enforcing rules and collecting assessments and delinquent assessments that everybody's treated the same. It doesn't matter what your religion is, it doesn't matter what your race is, it doesn't matter what your sexual orientation is, it doesn't matter your gender identity. Everyone should be treated equally. I think we all know that and we all believe that right. But when you start looking at then taking it the next step so that you create a more welcoming leadership environment on the board for diversity and again we're talking about diversity across the board religion, race, sexual orientation so that people can see themselves on the board, so that people can see their group on the board and feel welcome and feel like their voice matters. I'll tell you, feel welcome and feel like their voice matters. I'll tell you.
Speaker 2:So we have a great guide out there. It's a diversity, it's a diverse and inclusive communities guide and it includes a commitment to diversity in community. It's a really wonderful guide and I'll tell you that what we've done some research to collect data. When people receive a violation letter and they respond because they feel like they're being discriminated against, if a oftentimes that's not the case Sometimes it is, but oftentimes it's not If that board can turn to their diversity pledge and say we pledge to make sure that we are treating everybody fairly and equitably and back it up with statistics, it takes that away from the conversation so that there can be more meaningful conversations about equity and inclusion. So I also am very passionate about women in the workplace and the gender pay gap because sadly it exists and it still exists, believe it or not. We, the Foundation for Community Association Research, we just finished our 2024, we just published our 2024 salary and compensation survey and there is a gender pay gap in community association management we probably have. About 55% of our managers are women.
Speaker 2:Oh, wow 100% men and in the portfolio manager and the entry-level manager there's really no pay gap.
Speaker 1:Is there really a gender associated with the management role? Is that not? That's not a role as manager that's seen as more female versus male.
Speaker 2:We just happen to have more women than men in our industry that respond to our surveys, so I think it's very even right. It doesn't matter. But what we found is the higher paid positions in community management. Men are making more than women for the same positions the CEO, the senior executive, ceo of management company, senior executive, large-scale community association manager and high-rise manager. How often?
Speaker 1:do you conduct that survey?
Speaker 2:Dawn Every year.
Speaker 1:All right, let's keep an eye on it. Let's hope we're moving in the right direction.
Speaker 2:It's lower than the national average of gender pay gap, but it exists. So, Donna, let's get on this.
Speaker 1:We got to get on it. I have two comments to make about your DEI observations. One I think the inclusion concerns crop up a lot around holiday time and social events. I've seen that over the years and I've actually seen some communities evolve, thankfully. You know, decades ago they might have only been celebrating one holiday. It would be one set of decorations and that would be it. If you weren't included in that group, you were just excluded. And that would be it If you weren't included in that group, you were just excluded. Now I go out to meetings around holiday time and I see a lot more groups, a lot more holidays being celebrated. I think it can only make for healthier communities when people feel included Absolutely.
Speaker 1:And with the gender, let me say this I have noticed this is very heartening. I have noticed this is very heartening on our boards where we have men and women, I find the young, the millennials, those women. They have their voices. In my communities where I have very elderly board members 80s, 90s those women have found their voices. They'll tell the men to shut up and listen and they don't have any problem inserting them in the middle. Ok, the middle generation is where sometimes I see the women are always the proverbial secretary on the association and they may take a backseat to the stronger voices and the stronger opinions on the board. But I think on both ends of the spectrum we're doing pretty well.
Speaker 2:Interesting. I love that, I love that. And I'll tell you, before I dug into our data on the pay gap, my assumption was because I know a lot of women in this industry my assumption was our industry is different. We actually have it, we're equal. And then I dug into the data and I was surprised and I was, you know, I was disappointed. I'm like, okay, we've got to fix this. It's 2024.
Speaker 1:We've got to fix this Soon to be 2025, when this, when this episode comes out. So you have a global presence. You deal with associations not just in the United States but in other markets. Are there best practices from international associations that you think we should know about?
Speaker 2:So what I will say is what I continue to see is we have so much in common. We have a lot to share and a lot to learn from one another across the globe. Best practices from other countries I would say there are a couple of best practices I just heard of one from Germany that I need to do a little more digging into which has to do with an actual evaluation process for buildings that are older, that need work, that there's this whole equation of how they evaluate what to do with it next, and they include a local appraiser and include the locality in the process. So I think there's an option to learn from that particular process, and I hope to be able to do that sometime soon. I think one of the things I referenced earlier was how, in European countries, for example, it's been around longer.
Speaker 2:We're just babies, right Like here in the US. We're America, we're new. So community associations have been around a lot longer, condominiums have been around a lot longer in some of these European countries and I think we can learn from them. In the way we govern and that is, the managers do most of the work and the governing on covenant enforcement is less of a priority for these condominium buildings and it's what's more of a priority is our sustainability issues, maintenance issues, building issues, not necessarily covenant enforcement based on one neighbor complaining about somebody else's something happening, and I think that that's evolution and I think we're going to start seeing some of that, especially in some of our jurisdictions that have newer community associations. We're going to start seeing that be less important and just living and being be more important.
Speaker 1:I'm also wondering if the European community associations have any takeaways from us as they grapple with climate change, flooding and sea level rise.
Speaker 2:So again, they are much more interested in environmental efficiency and environmental sustainability issues in their buildings and they also have more government funds that are directed to those types of initiatives for those buildings. So could we learn from that, maybe, but that, will our government learn from that? I'm not sure We'll see.
Speaker 1:That's a whole different podcast episode, Dawn. Thank you so much. Please tell our listeners where they can find these resources, where they can find membership information, if you want, where they can find you.
Speaker 2:Of course, go to our website. We have everything on our website, caionlineorg. It's pretty easy to navigate, so you can just click around, find what you need. Please contact me anytime. My email address is dbauman at caionlineorg. And Donna, this has been so much fun and what a pleasure and privilege to spend this time with you. I really appreciate it. Thank you for this opportunity.
Speaker 1:Well, it's a privilege for us your expertise and your passion and keep fighting the good fight. You are a force to be reckoned with. Thank you, Donna Bauman. Thank you, CAI. Thank you, We'll do force to be reckoned with. Thank you, Dawn Bauman. Thank you, CAI. Thank you.
Speaker 2:We'll do it together. I appreciate it, thank you.
Speaker 1:Thank you for joining us today. Don't forget to follow and rate us on your favorite podcast platform, or visit TakeItToTheBoardcom for more ways to connect.